A single guy buys a house. Lives there for several years, paying the taxes and the mortgage. Then he finds Ms Wonderful, they get married, and she moves in with him.
I’ve been trying to figure out what the pros and cons are of having the new spouse added to the existing deed.
Are there any differences to ownership, liablilty, responsability, taxes, inheritance or anything else, between adding her and not adding her to the deed?
It used to be rare for a single person to buy a house so in some places the deed would say John Smith, unmarried.
Legally I don’t think it matters, I got married 1 year after I bought a house. We refinanced the house and she was on the new loan for the house but not on the deed.
I think you might get some tax benefits for claiming it by yourself.
As for ownership, there might be inheritance issues. Our first house had some title problems because the husband (with children from previous marriage) was on the title alone.
When he died, the house went to the wife. When she died, the house went to her niece. Before they could clear the title for us to buy from the niece, they had to get quit claims signed by all of his children and their spouses. The closing was delayed because of it.
If the house had been in both names, that wouldn’t have been an issue.
The “husband dies first” scenario was one that I had been wondering about. So there is a chance it could be a problem.
Any one have any info on if this would affect how things were divided up in case of a divorce (heaven forbid)?
If the house were just in his name, from before the marriage, is it different then if it’s in both names?
If the house was bought before the marriage and is in one person’s name only, then it’s that person’s house and it wouldn’t be included in the divorce assets.
IANAL but I think that’s true even in community property states.
There are a few issues:
One key advantage to adding the spouse to the deed is that you can add survivorship language, which makes things a bit easier for the surviving spouse.
The “unmarried man” thing actually has to do with dower and homestead issues. If you buy a home here in Michigan, for example, the wife automatically gets dower rights. Therefore, if the deed says, John Smith, “a married man,” you know you need John’s wife to sign instruments that transfer an interest in the property.
In states that recognize tenancy by the entireties, having both spouses on the deed can insulate the property from levy by either spouse’s creditors (creditors holding joint debts can still reach it though).
I was going to say that who is on the deed is unlikely to affect property division in a divorce. In most cases the more important facts are time of acquisition and source of funds. But I think in some cases it might. For example, I could see a judge in a community property state deciding that by adding the wife to the deed, the husband intended a gift of half of his interest in the house.
You add spouse to deed. One spouse gets mad at the other, runs up a whole bunch of debts and disappears. Creditors attached house.
You add spouse to deed. Turns out spouse is a deadbeat and doesn’t pay mortgage. You lose house and credit rating.
Thanks folks.
Some good issues to think on.
I bought a condo, got married, and did not add my wife to the title at that time. When I sold my condo a few years later, I was required to add my wife to the title before the sale could be completed.
And read “bit easier” as a small understatement. On deeds where the parties (don’t have to be spouses) have clear survivorship language so that the property is held in joint tenancy or as tenants by the entirety you are able to make property decisions to sell or mortgage the property usually with only having to produce a death certificate. It usually allows you to avoid probation of the estate, which is time consuming in the extreme.
I *believe – and Gfactor or another Doper-at-law would have to confirm or correct this – that tenancy by the entireties acts as a sort of tontine, that on the death of one spouse, title immediately and automatically passes to the surviving spouse, without the property having to pass through the estate and probate. (This is normally not the case in joint tenancy or tenancy in common.)
And to Polycarp, too:
Some states have simplified probate for small estates, especially those that basically include just a house. Still, assets that pass automatically on death surely simplify the process.
You can do that with a few other forms of ownership, too, depending on the jurisdiction. What makes tenancy by the entireties different, in the states that recognize it, is it’s lack of severability and alienability by a single spouse.
http://www.thomasmoens.com/tenancy_by_the_entirety.htm
Of course, there are some downsides, which you can read about at the site linked above.
Joint tenants will also have the title pass automatically to the surviving tenant(s). Tenancy in common, unstated tenancy which reverts to common tenancy, or divided percentage interests do not and have to be probated, at least here in Illinois, and I’m rather confident about Wisconsin and Indiana as well.
Title examiner represent.
One other thing to think about: if you add your bride to the deed, you may be deemed to have transmuted a non-marital (owned prior to marriage) asset into a marital asset which will then be included in a division of property at divorce. When you “add her to the deed,” you are giving her one-half of the asset.
If she cosigns a mortgage, but is not added to the deed, the lawyers on both sides of that divorce will love you guys, as the question of whether the asset was transmuted into marital property would be muddied.
N.B. Bottom line: Different states have different probate and marital laws. Your best bet for questions like this is to consult a competent lawyer knowledgeable about the laws in your state.
Wouldn’t the inheritance issues get solved with a properly-drawn will?
If the spouses are filing taxes separatedly, the one who is the official owner of the house is the one who pays property tax on it. Mortgage can be claimed by one or both depending on whether one or both “own” the debt, not on whether they are on the property’s deed.
If they file together, it’s a nonissue.
Right. This is a point I barely touched on above, but it is key. If you add the wife to the deed, you can’t do so and simulataneously assert that the property remains yours alone. That’s the whole point of adding her to the deed–take advantage of entireties and homesead laws (if they exist in your jurisdiction) and automatic change in ownership on death. All of these things are based on the idea that both spouses now own the property. You could do some fancier ownership stuff, like creating a life estate in the original owner and a remainder in the other spouse, but you’d lose the entireties and homestead advantages if you did that.
Wait a minute, I am confused on the non-marital asset angle: Say I have a house that is worth half a million dollars but only have 20 k in equity. I then get married, don’t change the deed in any way, but my wife and I together pay off the mortgage over 10 years. We then get divorced. It seems to me that many people in this thread are implying that the house (with no wife on the deed) would be considered a “non-marital” asset and would not be included in a division of property at the divorce even though it could be argued that the wife is entitled to 50% of the 480k in equity she helped pay for…
What am I missing?
A free-and-clear home owned by one spouse before the marriage is one thing. It gets a bit more complicated when mortgage payments are made from marital assets.
Nothing. You are correct. How this gets addressed in different jurisdictions depends entirely on state law and sometimes the mood of the judge.
In the jurisdiction I just left, there is a formula to separate the marital and non marital portions of real estate and to apportion the (usually) increase in value due to market forces as well. In that same jurisdiction, the name on the deed is a matter of supreme indifference – making it joint does not confer a marital gift unless there is additional evidence that this was both parties’ intention. And keeping it in one name does not make it separate property unless there is additional evidence that this was both parties’intention.
Other states handle it in other ways, other countries handle it in their own ways. Without information about where the house is, the question cannot be answered with respect to that aspect of ownership.
What about creating a family trust and moving “ownership” of the house into the trust? I’m seeing this in lawyer ads as a way to reduce probate issues down the road.